Zhongsheng Group Recorded Strong Growth for 2010 Interim Results
Revenue and Net Profit Increased by 66.0% and 153.4% Respectively
HONG KONG, Aug. 23 /PRNewswire-Asia/ --
Financial Highlights
For the 6 months
ended 30 June
2010 2009 Change
RMB ('000) RMB ('000) (%)
Revenue 8,806,325 5,303,864 +66.0%
Gross profit 936,582 432,090 +116.8%
Gross profit margin (%) 10.6% 8.1% +2.5% points
Profit from operations 601,768 261,238 +130.4%
Profit attributable to equity
holders of the Company 380,268 150,088 +153.4%
Net profit margin (%) 4.3% 2.8% +1.5% points
Zhongsheng Group Holdings Limited ("Zhongsheng Group" or the "Company", and together with its subsidiaries, the "Group"; Stock code: 881.HK), a leading national automobile dealership group in China, today announced its interim results for the six months ended 30 June 2010.
As Zhongsheng Group benefits from the ever increasing demand in the passenger vehicle market in China, Zhongsheng Group has recorded strong growth in its business during the period under review. For the six months ended 30June 2010, the Group achieved revenue of RMB8.81 billion, an increase of 66.0% from the same period last year. The gross profit for the same period has increased 116.8%, reaching approximately RMB936.6 million. Gross profit margin for the same period increased by 2.5% points to 10.6%. Profit attributable to equity holders of the Company for the six months ended 30 June 2010 reached RMB380.3million, representing an increase of 153.4% from the same period last year. Net profit margin also increased by 1.5% points to 4.3% for the same period. Earnings per share was RMB0.22 (Same period in 2009: RMB0.10). The Directors do not propose to declare any interim dividend for the six months ended 30 June 2010.
Founder, Chairman & Executive Director of Zhongsheng Group, Mr. HUANG Yi said, " Chinese economy continued to grow at a rapid pace in the past years. Meanwhile, living standard and purchasing power of the citizen further improved as a result of the accelerated urbanization and thus bringing a strong momentum of growth for the passenger vehicle market. China has now become the world's largest auto market. Capitalizing on the strong demand, we have expanded our existing 4S dealership network proactively through both organic growth and acquisitions and devoted to seize the opportunities arising in the market, thus enjoyed further increase in our profit as well as our market share in the auto market of China."
During the period under review, outstanding results were achieved by the Group's new automobile sales segment and after-sales services. Revenue from new automobile sales was RMB7,985.3 million, an increase of RMB3,172.7 million, or 65.9% compared to the corresponding period in 2009. Revenue from after- sales businesses amounted to RMB821.0 million, an increase of RMB329.7 million, or 67.1% compared to the corresponding period in 2009. New automobile sales business generated a substantial portion of the Group's revenue, accounting for 90.7% of the revenue for the six months ended 30 June 2010. The remaining portion of the revenue during the period was generated by after-sales businesses. The gross profit from new automobile sales business amounted to RMB540.5 million, an increase of RMB333.1 million, or 160.7% as compared to the corresponding period in 2009. Gross profit from after-sales services was RMB396.1 million, an increase of 76.2% compared to the same period of 2009 and accounted for 42.3% of the total gross profit.
As a leading national automobile dealership groups in China, Zhongsheng Group has an established strategic dealership network nationwide. Its 4S dealerships are located at the coastal cities in northeastern China, eastern China and southern China as well as selected inland regions, covering 11 provincial regions and 27 cities including Liaoning, Shandong, Yunnan, Guangdong, Zhejiang and Fujian, etc. The strategic network enables us to strengthen our leading position where our 4S dealerships locate, thus enjoying regional competitive advantage due to the relatively affluent populations in these regions. Since the beginning of 2010, we have set up 10 new 4S dealerships in regions of Liaoning, Yunnan, Fujian, Sichuan, Jilin and Jiangsu, etc, and acquired 12 4S dealerships in regions of Liaoning, Fujian, Shandong and Sichuan etc. Today, our nationwide network has reached 69 4S dealerships, consisting of 17 luxury brand dealerships and 52 mid-to-high-end brand dealerships.
Zhongsheng Group has been devoted to implement a multi-brands strategy that covers luxury and mid-to-high end international automobile brands. For the six months ended 30 June 2010, in terms of sales volume and number of 4S dealerships, we are one of the largest automobile dealership groups for Toyota and Lexus in China and both Toyota and Lexus are our top sales brands. During the six months ended 30 June 2010, revenue from sales of mid-to-high end brand automobiles amounted to RMB5.2 billion (Same period in 2009: RMB3.3 billion), accounting for 65.5% (Same period in 2009: 69.6%) of the revenue from new automobile sales. Revenue from sales of its luxury brand automobiles was RMB2.8 billion (Same period in 2009: RMB1.5 billion), accounting for 34.5% (Same period in 2009: 30.4%) of the revenue from new automobile sales for the same periods.
The enormous room for expansion in the passenger vehicle market in China has created huge potential in development for after-sales services. Zhongsheng Group is committed to expand its business. To further expand its after-sales services network, the Group has established quick service shops at Liaoning Province to provide fast and efficient repair, maintenance and detailing services for the six months ended 30 June 2010.
Looking ahead, the Group will continue to expand its 4S dealership network focusing on locations in northeastern, eastern and southern coastal region and selected inland regions. In addition, the Group will tap into the second and third tier cities to increase its market share. Meanwhile, the Group will actively look for potential acquisition targets with long-term strategic value to further expand the Group's 4S dealership network. The Group will continue to seek opportunities to work with potential automobile brands to expand its brand portfolio, further develop the Group's after-sales services through establishing quick service shops in the vicinity of its 4S dealerships. Moreover, by leveraging on the existing resources of new automobiles sales and customer base, the Group also plans to develop used automobiles sales business to further enlarge its scope of business.
Founder, CEO & Vice-Chairman of Zhongsheng Group, Mr. LI Guoqiang concluded, "China is an emerging market with huge growth potential in new automobiles sales and after-sales business. We will continue to expand our business and are determined to meet the ever-changing needs of our customers in China. With the aim of capitalizing on the huge potential of the auto market in China, we will continue to seize business opportunities, strive to consolidate our market leading position and achieve excellence."
About Zhongsheng Group Holdings Limited
Zhongsheng Group was listed on the Main Board of the Hong Kong Stock Exchange on 26 March 2010. Zhongsheng Group is one of the leading national automobile dealership groups in China. The Group owns a comprehensive 4S dealership network nationwide, covering affluent cities and regions of China. Zhongsheng Group focuses on luxury and mid-to-high end automobile brands, namely luxury brands of Benz, Lexus and Audi, and mid-to-high end brands of Toyota, Nissan and Honda etc. The Group was the first company being granted dealership rights by Toyota and one of the first authorized dealerships for Lexus and Audi in China. The Group strives to develop "one-stop automobile shop" business model. In addition to new automobile sales business in its 4S dealerships, the Group's after-sales businesses offer spare parts, automobile accessories, repair and maintenance services, detailing services and other automobile-related products and services.
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SOURCE Zhongsheng Group Holdings Limited
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